Charles River Laboratories Stock Beneish M Score
| CRL Stock | USD 229.03 1.22 0.54% |
Charles | Beneish M Score |
At this time, it appears that Charles River Labora is an unlikely manipulator. The earnings manipulation may begin if Charles River's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Charles River executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Charles River's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.4
Beneish M Score - Unlikely Manipulator
Charles River Beneish M-Score Indicator Trends
The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Charles River's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
| Current Value | Last Year | Change From Last Year | 10 Year Trend | ||||||
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| Net Receivables | 819.4 M | 780.4 M |
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| Total Revenue | 4.3 B | 4.1 B |
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| Total Assets | 8.6 B | 8.2 B |
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| Total Current Assets | 1.7 B | 1.6 B |
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| Non Current Assets Total | 6.9 B | 6.6 B |
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| Property Plant Equipment | 2.2 B | 2.1 B |
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| Depreciation And Amortization | 329.8 M | 314.1 M |
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| Selling General Administrative | 787.9 M | 750.4 M |
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| Total Current Liabilities | 1.1 B | 1.1 B |
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| Non Current Liabilities Total | 3.7 B | 3.5 B |
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| Short Term Debt | 463.2 M | 441.1 M |
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| Long Term Debt | 2.8 B | 2.6 B |
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| Operating Income | 648.1 M | 617.3 M |
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| Total Cash From Operating Activities | 718.1 M | 683.9 M |
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| Short Term Investments | 853.3 K | 898.2 K |
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| Long Term Investments | 150.3 M | 243.8 M |
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| Gross Profit Margin | 0.42 | 0.3679 |
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Charles River Labora Beneish M-Score Driver Matrix
One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Charles River's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Charles River in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Charles River's degree of accounting gimmicks and manipulations.
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About Charles River Beneish M Score
M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.
Other Operating Expenses |
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Charles River Earnings Manipulation Drivers
Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Charles River. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 (projected) | ||
| Net Receivables | 514.0M | 617.7M | 642.9M | 752.4M | 780.4M | 819.4M | |
| Total Revenue | 2.6B | 2.9B | 3.5B | 4.0B | 4.1B | 4.3B | |
| Total Assets | 4.7B | 5.5B | 7.0B | 7.6B | 8.2B | 8.6B | |
| Total Current Assets | 1.0B | 1.2B | 1.3B | 1.4B | 1.6B | 1.7B | |
| Net Debt | 1.8B | 1.9B | 2.7B | 2.9B | 2.8B | 2.9B | |
| Short Term Debt | 38.5M | 50.2M | 2.8M | 50.2M | 441.1M | 463.2M | |
| Long Term Debt | 1.8B | 1.9B | 2.6B | 2.7B | 2.6B | 2.8B | |
| Operating Income | 351.2M | 432.7M | 589.9M | 651.0M | 617.3M | 648.1M | |
| Investments | (21.4M) | (15.3M) | (39.0M) | (153.7M) | (280.4M) | (266.4M) |
About Charles River Fundamental Analysis
The Macroaxis Fundamental Analysis modules help investors analyze Charles River Laboratories's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Charles River using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Charles River Laboratories based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Charles River Investors Sentiment
The influence of Charles River's investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in Charles. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock market does not have solid backing from leading economists and market statisticians.
Investor biases related to Charles River's public news can be used to forecast risks associated with an investment in Charles. The trend in average sentiment can be used to explain how an investor holding Charles can time the market purely based on public headlines and social activities around Charles River Laboratories. Please note that most equities that are difficult to arbitrage are affected by market sentiment the most.
Charles River's market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Charles River's and other traded tickers. The bigger the bubble, the more accurate is the estimated score. Higher bars for a given day show more participation in the average Charles River's news discussions. The higher the estimated score, the more favorable is the investor's outlook on Charles River.
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards Charles River in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, Charles River's short interest history, or implied volatility extrapolated from Charles River options trading.
Pair Trading with Charles River
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Charles River position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Charles River will appreciate offsetting losses from the drop in the long position's value.Moving together with Charles Stock
| 0.8 | DRRX | Durect Earnings Call This Week | PairCorr |
Moving against Charles Stock
| 0.5 | SBFMW | Sunshine Biopharma | PairCorr |
| 0.41 | CUE | Cue Biopharma Financial Report 14th of May 2024 | PairCorr |
The ability to find closely correlated positions to Charles River could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Charles River when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Charles River - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Charles River Laboratories to buy it.
The correlation of Charles River is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Charles River moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Charles River Labora moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Charles River can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Check out Charles River Piotroski F Score and Charles River Altman Z Score analysis. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Complementary Tools for Charles Stock analysis
When running Charles River's price analysis, check to measure Charles River's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Charles River is operating at the current time. Most of Charles River's value examination focuses on studying past and present price action to predict the probability of Charles River's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Charles River's price. Additionally, you may evaluate how the addition of Charles River to your portfolios can decrease your overall portfolio volatility.
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Is Charles River's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Charles River. If investors know Charles will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Charles River listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth (0.01) | Earnings Share 9.23 | Revenue Per Share 80.61 | Quarterly Revenue Growth (0.08) | Return On Assets 0.0519 |
The market value of Charles River Labora is measured differently than its book value, which is the value of Charles that is recorded on the company's balance sheet. Investors also form their own opinion of Charles River's value that differs from its market value or its book value, called intrinsic value, which is Charles River's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Charles River's market value can be influenced by many factors that don't directly affect Charles River's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Charles River's value and its price as these two are different measures arrived at by different means. Investors typically determine if Charles River is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Charles River's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.